What is availability bias?

• A. A person's dependence on a single piece of information when making decisions
• B. The anxiety or discomfort that one faces when their idea is being put down or replaced with a contrary idea
• C. The tendency to avoid responsibility in group decision-making
• D. The reliance on previous occasions that one has been a part of when trying to predict a future event

Which of the following is an example of an internal stakeholder?

• A. Regulatory authorities enforcing compliance requirements
• B. Managers reporting and escalating risks within the organization
• C. Customers concerned with product and service quality
• D. Shareholders seeking returns and sustained performance

An organization ensures that risk management is embedded into its governance structures, aligning accountability and oversight roles with its strategic objectives and culture. Which component of the risk management framework is being applied?

• A. Design
• B. Integration
• C. Evaluation
• D. Implementation

Scenario 6:
Trunroll is a fast-food chain headquartered in Chicago, Illinois, specializing in wraps, burritos, and quick-serve snacks through both company-owned and franchised outlets across several states. Recently, the company identified two major risks: increased dependence on third-party delivery platforms that could disrupt customer service if contracts were to fail or fees rose sharply, and stricter health and safety inspections that might expose vulnerabilities in hygiene practices across certain franchise locations. Therefore, the top management of Trunroll adopted a structured risk management process based on ISO 31000 guidelines to systematically identify, assess, and mitigate risks, embedding risk awareness into daily operations and strengthening resilience against future disruptions.
To address these risks, Trunroll outlined and documented clear actions with defined responsibilities and timelines. Regarding the dependence on third-party delivery platforms, the company decided not to move forward with planned partnerships with third-party delivery apps, as the risk of losing control over the customer experience and rising costs outweighed the potential benefits.
To address stricter health inspections across franchises, Trunroll invested in stronger hygiene protocols, mandatory staff training, and upgraded monitoring systems to reduce the likelihood of violations. Yet, management understood that some exposure would remain even after these measures. To address this risk, they decided to use one of the insurance methods, reserving internal financial resources to cover unexpected losses or penalties, ensuring the remaining risk was managed within acceptable boundaries.
Additionally, Trunroll set up a cloud-based platform to document and maintain risk records. This allowed managers to log supplier inspection results, training outcomes, and incident reports into one secure system, while also providing flexibility to update and scale applications as needed without managing the underlying infrastructure. In doing so, Trunroll ensured that all risk-related information is documented in progress reports and incorporated into mid-term and final evaluations, with risk management being updated regularly to monitor changes and treatments.
Based on the scenario above, answer the following question:
Based on Scenario 6, which insurance method did Trunroll use in which internal financial resources were reserved to cover unexpected losses or penalties?

• A. Self-insurance
• B. Risk pooling
• C. Reserve funds
• D. Contingent credit lines

Scenario 4:
Headquartered in Barcelona, Spain, Solenco Energy is a renewable energy provider that operates several solar and wind farms across southern Europe. After experiencing periodic equipment failures and supplier delays that affected energy output, the company initiated a risk assessment in line with ISO 31000 to ensure organizational resilience, minimize disruptions, and support long-term performance.
A cross-functional risk team was assembled, including representatives from engineering, finance, operations, and logistics. The team began a structured and systematic review of the energy production process to identify potential deviations from intended operating conditions and assess their possible causes and consequences. Using guided discussions with prompts such as "too high," "too low," or "other than expected," they explored how variations in system behavior could lead to operational disruptions or safety risks.
One risk identified was the failure of the main power inverter system at one of the company's key solar facilities-a single point of failure with high production dependence. To better understand this risk, the team used a structured visual technique that mapped the causes leading up to the inverter failure on one side and the potential consequences on the other. It also illustrated the controls that could prevent or mitigate both sides.
During discussions, several team members were inclined to focus on positive evidence supporting the belief that the inverter was reliable, while giving less consideration to contradictory data from maintenance reports. Differing viewpoints were not immediately discussed, as many participants felt more confident agreeing with the general group view that the likelihood of failure was low. It was only after a detailed review of supplier reports that the team revisited their assumptions and adjusted the analysis accordingly.
Ultimately, the likelihood of failure was determined to be "possible" based on annual system monitoring and maintenance records. However, the consequences were potentially severe, including an estimated €450,000 in lost revenue per week of downtime, contract penalties, and negative stakeholder perceptions. The team assumed a potential downtime of two weeks per failure, resulting in a total potential loss of €900,000 per event.
To better quantify the financial exposure to this risk, the team multiplied the estimated probability of failure (10%) by the potential loss per event (€900,000), yielding an annual expected impact of €90,000. This calculation provided a clearer basis for prioritizing the inverter failure risk relative to other risks in the risk register.
Based on the scenario above, answer the following question:
What did the team at Solenco determine when they examined the likelihood and consequences of the inverter failure?

• A. Risk tolerance
• B. Risk appetite
• C. The level of risk
• D. The criteria for risk acceptance